Ecommerce sites, especially those facilitating online payments between users (peer-to-peer payments and money transmitter businesses), as well as credit card processing companies, struggle to verify the identity of their customers. Traditional methods generally include collecting basic personal identifying information from customers, including name, address, social security number and phone number, and cross referencing this data with publicly and privately available databases to ensure that customers are who they say they are. More sophisticated e-commerce businesses will generate “reputation scores” or “risk scores” based on the data they have aggregated regarding particular users. Some businesses use third-parties that specialize in creating these reputation scores based on a variety of publicly and privately available data, including companies (such as Rapleaf) that use membership in certain online social networks and web services as data points.
Web-based businesses will often accumulate additional data about their customers, including machine fingerprints, usage patterns, IP address, history, etc., which they plug into a rules engine—a middleware application that allows the creation and prioritization of rules to be used in managing fraud. These engines allow merchants to create rules that will help evaluate orders and transactions as they come in. The rules engine can have many different names, such as “decision software,” “management software” or “order management.” Most payment and order management systems will have some of the capabilities to build and apply rules.
As fraudsters become more and more sophisticated, traditional methods of protecting businesses against fraud, identity theft, terrorism and money laundering are becoming increasingly ineffective. Even robust rules engines and reputation scores based on large amounts of user data do not adequately protect businesses from the risks associated with fraud.
The foregoing examples of the related art and limitations related therewith are intended to be illustrative and not exclusive. Other limitations of the related art will become apparent upon a reading of the specification and a study of the drawings.